Natural gas futures off 5-month low on warmer weather in south

Forexpros – Natural gas futures rebounded from a five-month low on Tuesday, as forecasts for hotter-than-expected weather in southern U.S. states bolstered demand expectations for the power-plant fuel.

On the New York Mercantile Exchange, natural gas futures for October delivery traded at USD3.972 per million British thermal units during U.S. morning trade, surging 1.52%.     

Prices fell to a five month low of USD3.583 per million British thermal units on Monday, following a larger-than-expected increase in gas storage.

Gas prices advanced after the Commodity Weather Group said that temperatures will be higher than average across the South from California to Georgia from August 24 to August 28.

The Northeast and Midwest will have normal weather next week while the rest of the country will be hotter than average, according to MDA EarthSat Weather in Gaithersburg, Maryland.

Power plants use about 30% of the nation’s gas supplies, according to the U.S. Energy Department.

Also Tuesday, China’s Ministry of Finance announced that it planned to introduce tax rebates to boost imports of natural gas.

The Ministry said rebates will apply when import costs are higher than domestic wholesale prices. They will cover the period from 2011 through 2020, as well as prior imports from central Asian countries.

China's gas demand is projected to triple in the coming decade to about 300 billion cubic meters and imports are likely to make up nearly one-third of that, analysts have said. Imports currently account for roughly 20% of consumption.

Elsewhere on the Nymex, light sweet crude oil futures for delivery in October edged 0.17% higher to trade at USD84.55 a barrel, while heating oil for September delivery was fractionally higher, inching up 0.05% to trade at USD2.910 per gallon.




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